Noelle Company began operations on January 1. Authorized were 120,000 shares of P10 par value ordinary shares and 240,000 shares
Noelle Company began operations on January 1. Authorized were 120,000 shares of P10 par value ordinary
shares and 240,000 shares of 10%, P100 par value
shareholders’ equity occurred during the first year of operations:
Jan 1 Issued 30,000 ordinary shares to the corporation promoters in exchange for land valued at
P1,020,000 and services valued at P420,000. The property had cost the promoters P540,000
three (3) years before and was carried on the promoters’ books at P300,000.
Feb 23 Issued 60,000 preference shares with a par value of P100 per share. The shares were issued
at a price of P150 per share, and the company paid P450,000 to an agent for selling the shares.
Mar 10 Sold 18,000 ordinary shares for P390 per share. Issue costs were P150,000.
Apr 10 24,000 ordinary shares were sold under share subscriptions at P450 per share. No shares are
issued until full payment of a subscription contract. No cash was received as a down payment.
July 14 Exchanged 4,200 ordinary shares and 8,400 preference shares for a building with a fair value
of P3,060,000. In addition, 3,600 ordinary shares were sold for P1,440,000 in cash.
Aug. 3 Received payments in full for half of the share subscriptions and payments on account on the
rest of the subscriptions. Total cash received was P8,400,000. Share certificates were issued
for the subscriptions paid in full.
Dec 31 Net income for the first year of operations was P3,600,000.
Dec 31 Declared a cash dividend of P10 per share on preference shares and P20 per share on ordinary
shares, payable on February 10 to shareholders of record on January 15.
Based on the preceding information:
b. Compute the balances of each of the following accounts:
1. Preference shares ______________
2. Share premium – preference shares ______________
3. Ordinary shares ______________
4. Share premium – ordinary shares ______________
5.
6. Total shareholders’ equity
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